Supervision Of Foreign Banks, Law And Economics Analysis

As China promised a policy of opening over the banking industry in five years while it's took part in WTO in 2001, China cancelled all the restricts on the region and business and gave the national treatment to foreign commercial banks in the end of 2006. The open policy of the banking industry of china is necessary for the global economic integration and the open china. When the foreign commercial banks entered and started business in China, it brought opportunity as well as risk, which caused the necessary of regulation of and supervision. In the end of 2006, The State Department promulgated The Regulations of the foreign commercial banks Law of the People's Republic of China, the Committee of Regulation of and Supervision over the Banking Industry of China promulgated the Rules of The Regulations of the foreign commercial banks Law of the People's Republic of China, on which the regular and supervisory organization build the regular and supervisory system. As the REGULATIONS and the RULES took effects for more than a year, this article will study its effect, try to find its inadequacy and improve it, based on the fact of implement and with the law-economics method.This article use the law-economics method as a point of view, and it doesn't means take the economic effect as the only and the highest standard, and also it doesn't means rejection of other measure value of law. The law-economics method means the intersection of different study, and it use the positive ways, therefore it can overcome the limit of single legal view, break thought the logical circle of conceptualist jurisprudence, and make a scientific research. The previously study of the regulation of and supervision over the banking industry have limited themselves by their own way generally. The economic methods are rarely seen. All the studies are focus on how to build an effective system of regulation and supervision before 2007, which doesn't matter as the REGULATIONS and the RULES took effects. While the Subprime lending crisis broken in USA and effected the whole world rapidly and deeply, the regulation and supervision over banking industry is becoming a topic of general interest. So this article is present at the right moment.The author use Market Malfunction Theory on analysis of the necessary of the regulation and supervision, and try to use the Government Restriction Theory and Double Malfunction to discuss how to get an effective regulation and supervision. By using the Government Restriction Theory, Game Theory, Social Costs Theory, Deterrent Theory, the author make a exhaustive study on the effect of the regulation and supervision on the base of discuss about five steps: market access, business courses, sustain regulation and supervision, withdraw from the market, legal duty. As a conclusion, the author find the steps draw from the REGULATIONS and the RULES are basically effective, but doesn't enough in the sustain regulation and supervision and legal duty. And the author gives some advices about the legislation and the execution. This article is permeated with the assumption of reason person and cost-effect method.